Two former senior managers at HBOS were among eight people charged on Tuesday
night in connection with an alleged £35m fraud.

The allegations involved “kick-backs” being paid to bank managers to hand lucrative administration contracts to a small group of external consultants.

Lynden Scourfield, 50, and Mark Dobson, 52, formerly senior managers in the Reading and London offices of HBOS, were charged by police with conspiracy to corrupt, following a two-year investigation codenamed 'Operation Hornet’.

As well as the two bankers, consultants David Mills and Michael Bancroft were charged along with their wives, Alison Mills and Beverley Bancroft.

Mr Scourfield’s wife, Jacqueline Scourfield, was also charged, as was John Cartwright, who was described as an “associate” of Mr Mills and Mr Bancroft.

All eight were released on bail and have been ordered to attend a hearing at Reading Magistrates Court later this month.

Mr Scourfield is alleged to have received “numerous high-value gifts” from Quayside Corporate Services (QCS), a turnaround consultancy founded by Mr Mills, a former NatWest banker.

In return for these gifts, Mr Scourfield is alleged to have, over a period of seven years, appointed QCS to administer bank loans to companies that were in financial difficulty.

The men’s wives are alleged to have helped them launder the money related to the fraud, according to details of the charges contained in a statement by the Crown Prosecution Service.

The alleged fraud is one of the largest uncovered in the banking industry since the financial crisis and sources have suggested the true scale of the alleged conspiracy could run into hundreds of millions and even billions of pounds.

Last year, Peter Cummings, the former head of wholesale banking at HBOS, was banned for life from working in the City and fined £500,000 following a report by the Financial Services Authority into the lender’s collapse.

Mr Cummings has been widely held to be responsible for the risky lending that forced HBOS to request an emergency multi-billion pounds bailout in late 2008. The lender was subsequently merged with Lloyds TSB to create Lloyds Banking Group.

Mr Cummings has not been connected in any way with the alleged fraud at HBOS Reading.

In a statement Lloyds said: “We cannot comment on the detail of this investigation by Thames Valley Police or on the charges that have been brought.

“Neither Bank of Scotland nor Lloyds Banking Group is the subject of the investigation. We have been assisting the Police with their investigation and will continue to do so.”